Mission Bay Prepares for Makeover

City Sees Proposed Salesforce.com Campus as Key to Redevelopment Effort, but Some Complain Area Lacks Human Scale

By

John Letzing

June 23, 2011

San Francisco's effort to transform an abandoned rail yard on its eastern shore in Mission Bay into an urban center is poised for a serious boost from plans by Salesforce.com Inc.CRM-0.08% to build a sprawling corporate campus in the area.

Urban-planning experts say the arrival of Salesforce will provide a vital stimulus for a once-neglected part of the city. But the bold design for the campus is just beginning a monthslong approval process, and Chief Executive Marc Benioff is leaving open the possibility that the company could simply pick a different location for its new headquarters. Some civic groups and architects, meanwhile, lament that the corporate-driven development isn't creating the same neighborhood feel as other sections of the city.

ENLARGE

A rendering of the proposed Salesforce.com campus shows plans for a Jumbotron screen overlooking a plaza.
Salesforce.com

The Mission Bay redevelopment zone was established in 1998, anchored by a new campus of the University of California, San Francisco. City officials, who envisioned Mission Bay as a center for health care and medical research, say 35 biotech firms now are based in the area and take up more than one million square feet of office space. Salesforce.com, a business software maker now based in the city's Financial District and South of Market Street, is proposing eight buildings containing roughly two million square feet. Mission Bay also is designed to include 6,000 housing units, half of which have been built so far.

Mission Bay "is the most important thing for San Francisco's economy in the past 30 years, if not longer," said Michael Teitz, an emeritus professor of city and regional planning at the University of California, Berkeley. "The city was headed in a direction that was basically tourism, and some software development during the dot-com boom, but it didn't have what I'd regard as a solid, modern sector in the economy—and I think Mission Bay does that."

Yet critics say the large buildings and plazas planned for the Salesforce campus won't improve what they perceive as an unwelcoming atmosphere in Mission Bay.

"Unfortunately, that part of the city is still a bit of a wasteland, and the project doesn't do much to change that," said Eric Corey Freed, the founder of organicARCHITECT in San Francisco. Mission Bay, he said, offered the chance to build a new and vibrant neighborhood. Instead, he said, the area is "a place that feels cold, out of scale and out of touch with humanity."

Mission Bay is a public-private partnership. Private firm FOCIL-MB LLC uses a developer partner to build the infrastructure, and is reimbursed as the redevelopment agency issues bonds backed by increases in property-tax revenue and fees within the redevelopment zone. The agency has issued $320 million in bonds for Mission Bay, while the area's infrastructure is ultimately expected to cost about $700 million, said Kelley Kahn, the project manager for the redevelopment area. She added that the project is in year 13 of a 25-year buildout.

Only three of the area's more than 70 lots have yet to be sold by FOCIL-MB, Ms. Kahn said. Much of the land still unoccupied is expected to be filled by Salesforce.com, which purchased 14 acres for $278 million, and an adjacent UCSF hospital complex expected to open in 2014. Salesforce.com didn't receive any tax breaks for the campus.

Renderings of the Salesforce.com campus, released earlier this month, feature a flashy design. A public square is anchored by a hot-pink Jumbotron video screen.

ENLARGE

A portion of the area in Mission Bay where the Salesforce.com headquarters would be built.
Brian L. Frank for The Wall Street Journal

"That was my idea," Mr. Benioff, the Salesforce.com CEO, said of the screen. "Putting something like that there can add a lot of energy." The Jumbotron could be used for things such as employee presentations and public entertainment, he said.

Salesforce.com is hoping for design-review approval from the city by September. "If we can't get the approvals we could also end up somewhere else," Mr. Benioff said.

The redevelopment agency's Ms. Kahn said that while she didn't anticipate problems with the design review, the pink Jumbotron might face additional environmental scrutiny. Overall, Ms. Kahn said, "we're generally, based on what we've seen, pleased."

Mr. Benioff argued that a dramatic influx of color in Mission Bay would liven an area that until now has had an "office park" feel.

Mr. Benioff said he first became intrigued by the Mission Bay property when visiting the site of the UCSF children's hospital he is helping fund with a $100 million gift.

Mission Bay has been the focus of disputes over how to best develop it dating to the 1980s. While the area is physically close to downtown, its location on the opposite side of Mission Creek and Interstate 280 can make it feel remote.

The project's housing also has generated complaints. A lawsuit originally filed in 2006 by occupants of the Beacon, a nearly 600-unit condo development, alleges flawed construction and insufficient disclosures about soil contamination beneath the building. An attorney representing the real-estate company that sold the condos says buyers were informed of the soil issues prior to the sales, and that the contamination doesn't pose a danger to residents. The case has been moved to arbitration, said Patrick Catalano, an attorney representing the plaintiffs.

Salesforce.com, which has about 2,750 employees in the Bay Area, expects to house between 8,000 and 9,000 at the new headquarters, designed by Mexico City-based architects Legorreta + Legorreta. The company said it doesn't yet have an estimate for the construction cost or move-in date.

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.